India urgently needs privatization of its DISCOMs!
90% of Indiaโs power distribution, controlled by respective state governments, has now become a breeding ground for inefficiencies. The accumulated losses stand at INR 6.5 lakh crore as of FY23, which is well over 20% of Indiaโs central budgeted annual revenue. Reasons?
- ๐๐ง๐๐๐๐ข๐๐ข๐๐ง๐ญ ๐จ๐ฉ๐๐ซ๐๐ญ๐ข๐จ๐ง๐ฌ: Issues in power procurement, billing, and collection practices
- ๐๐ข๐ ๐ก ๐๐จ๐ฌ๐ญ๐ฌ: Rising cost due to higher interest rates, rising power demand, and the cost of imported coal
- ๐๐จ๐จ๐ซ ๐๐๐ฌ๐ก ๐๐ฅ๐จ๐ฐ: Delayed consumer payments, leading to insufficient cash income, preventing timely payments to energy generators
- ๐๐ง๐ฌ๐ฎ๐๐๐ข๐๐ข๐๐ง๐ญ ๐ญ๐๐ซ๐ข๐๐๐ฌ: Many times insufficient tariffs can contribute to losses
- ๐๐ก๐๐๐ญ: High levels of theft can contribute to losses
One of the only state to have privatized its power distribution is Odisha where 51% stake was taken over by TATA Power, which has swung back to profits and demand continuing to rise 20% YoY due to effective & efficient service. Similar is the case of Delhi which has seen minimal outrage this year despite demand hitting new high in summers. There too, it was Tata Power who played the key role!
More on this coming on โFinding Outperformersโ
| Subscribe To Our Free Newsletter |
